Fin - 419 - Week - 5 - 16132

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  • From: Finance,
  • Posted on: Mon 01 Apr, 2013
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Fin - 419 - Week - 5

Solution Description

How regulatory bodies affect financial decision making


In today’s era of free markets and globalization, we need a strong regulatory frame work to prevent corporate malfeasance and to protect the investors along with their interests. Apart from that the free market is a wonderful phenomenon in the history of mankind and it gives the right to choose on what we want to do with our money and resources. However after the 1929, NY Stock Exchange Crash Uncle Sam decided to intervene in the securities market and establish the SEC( Securities and Exchange Commission) in 1934. However up till now, government intervention has always been limited to that of a regulator rather than a player in the market

Whilst making financial decisions these days, one needs to adhere the regulatory guidelines, laws and by-laws as an investor or beneficiary. The regulatory bodies like the SEC( Securities and Exchange Commission) make regulations from time to time in order to ensure the competitiveness and continuance of the market by fair and pragmatic means. Amid so many corporate scandals of biblical proportions, like Enron ,Tyco and WorldCom that shook Wall Street and Corporate America. In light of new laws like the Patriot Act, it has become illegal for